Chalco Plans Share Placement to Support Alumina Project    

Aluminum Corporation of China (Chalco, SH: 601600) plans to issue up to 1 billion domestic shares to raise no more than RMB10 billion, it said in a stock exchange filing on July 1st. The board has approved the proposal.
   The proceeds will be used to fund an 800 000 t/a alumina project in Chongqing, another alumina plant in Xing county, Shanxi province, and an expansion project by its Zhongzhou subsidiary on the ore dressing Bayer process system - a typical chemical metallurgical process for alumina production. About RMB2 billion of the proceeds will be used to replenish working capital.
   The 800 000 t/a Chongqing plant is slated to start production in 2010, producing metallurgical grade alumina. The plant needs total investment of RMB4.75 billion, among which RMB2.3 billion will be funded by the share sale and the rest will be financed by internal capital.
   Construction of the Xing county project - also an 800 000 t/a metallurgical grade alumina plant - will take two years. It needs total investment of RMB5.23 billion, of which RMB3.7 billion will come from the share placement.
   The ore dressing Bayer process system expansion program will take two years to be completed and requires total investment of RMB2.99 billion, of which RMB2 billion will be funded by the share sale and the rest by internal capital. Upon completion, the project will add 700 000 tons of annual alumina capacity to the company. By then, the Zhongzhou branch's annual alumina capacity will rise to 1 million tons based on sintering method and 1.3 million tons with the ore dressing Bayer process.
   The projects funded by the share placement will help the company optimize its "bauxite-alumina-aluminum-aluminum processing" industrial chain, improve its competitiveness and fine-tune the business structure, Chalco said in its filing. The company's profitability will be further improved and could develop in a more sustainable way.